808011--12/19/2006--WINNER_MEDICAL_GROUP

related topics

{operation, international, foreign}

{customer, product, revenue}

{product, liability, claim}

{regulation, change, law}

{stock, price, share}

{regulation, government, change}

{personnel, key, retain}

{property, intellectual, protect}

{provision, law, control}

{system, service, information}

{control, financial, internal}

{stock, price, operating}

RISKS RELATED TO OUR BUSINESS Our dependence upon international customers may impede our ability to supply products. We engage in international sales, which expose us to trade restrictions. Expansion of our business may put added pressure on our management, financial resources and operational infrastructure impeding our ability to meet any increased demand for our medical products and possibly hurting our operating results. We rely on patent and trade secret laws that are complex and difficult to enforce. We depend on key personnel, and turnover of key employees and senior management could harm our business. Our revenues are highly concentrated in a single custome r and our business will be harmed if our customer reduces its orders from us. We are subject to potential product liability claims for which we do not have insurance coverage. We may not be able to adequately finance the significant costs associated with the development of new medical products. We may be exposed to potential risks relating to our internal controls over financial reporting and our ability to have those controls attested to by our independent auditors. Our holding company structure and Chinese accounting standards and regulations may limit the payment of dividends. RISKS RELATED TO OUR INDUSTRY Cost containment measures that are prevalent in the healthcare industry may result in lower margins. Our failure to comply with ongoing governmental regulations could hurt our operations and reduce our market share. Our margins are reduced when we sell our products to customers through a buying group. RISKS RELATED TO DOING BUSINESS IN CHINA Changes in China s political or economic situation could harm the company and its operational results. Our business is largely subject to the uncertain legal environment in China and your ability to legally protect your investment could be limited. The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. Future inflation in China may inhibit our activity to conduct business in China. Restrictions on currency exchange may limit our ability to receive and use our revenues effectively. The value of our securities will be affected by the foreign exchange rate between U.S. dollars and Renminbi. RISKS RELATED TO THE MARKET FOR OUR STOCK Our common stock is quoted on the OTC Bulletin Board, which may have an unfavorable impact on our stock price and liquidity. We are subject to penny stock regulations and restrictions. Certain of our stockholders hold a significant percentage of our outstanding voting securities. Certain provisions of our Articles of Incorporation may make it more difficult for a third party to effect a change- in-control.

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808011--12/19/2006--WINNER_MEDICAL_GROUP_INC